Hellas: Ship owners turn to tanker new buildings

Hellenic shipping companies have been investing heavily in newbuilding tankers over the course of the past couple of months month or so, in what is a clear sign of increasing confidence in the wet sector’s long term prospects. It’s worth noting that just in the month of March, it is estimated that a total of nearly 800 million euros was invested for the acquisition of at least 15 tankers new buildings in Asian shipyards. It’s a noted increase versus the first couple of months of the year, while over the course of the first few weeks of April, shipbrokers estimate that an additional 500 million euros was invested by Greek shipping interests.

A similar trend was evident during April as well, with a total of 966 million euros invested for 15 new buildings, out of which 12 were for the tanker markets. According to figures compiled by Golden Destiny during the first quarter, ship owners from Greece invested a total of $2.63 billion for the acquisition of vessels of all kinds, either new buildings or second hand ships. Over the same period last year, this number totaled close to $7 billion, in what was a significantly more bullish market environment, especially in the dry bulk market. During the first quarter, Greek owners have invested in 28 newbuilding tankers, 2 LNG vessels and 2 LPGs, as well as 20 dry bulkers, with the total amount rising to $1.52 billion.

However, over the course of the past couple of months, the focus has been heavily shifted towards the wet sector. It’s worth noting that Hellenic owners invested in new ships worth $9.59 billion last year with an upturn in appetite for big crude tankers, Golden Destiny said in its annual newbuilding survey. This left Greek owners ahead of the $8.77 bn invested by their Chinese counterparts during a year in which spending on new buildings totalled $88.83bn, according to Golden Destiny’s numbers.

Among April’s orders, one can notice some of the “heavyweights” of the Hellenic shipping community, like Angelikoussis’ Maran Tankers, which ordered a duo of VLCCs with DSME, for a price of $97 million each, or Prokopiou’s Cardiff Marine, which invested in four Aframaxes (at $57.5 million each) with New Times Shipyards and two more Suezmaxes for $67 million each (with Samsung Heavy Industries).

In its latest monthly newbuilding report covering April, Golden Destiny said that “downward momentum persists in the pace of secondhand and newbuilding investments with tankers being on the frontline after the upward trend in the VLCC segment from the end of last quarter of previous years. Asset prices for secondhand bulkers plunge every month to new lows, while the main trend of these days is the conversion of capesize new buildings in the tanker segment.

S&P activity in the secondhand market for April 2015 ended at levels below 120 vessel purchases, while the weekly reported average number of transactions surpassed the levels of 30 vessels. In the newbuilding business, the level of investments per week recorded a marginal increase of previous month with 25 new orders on average per week, from 22 in March 2015, but they are still at the same weak momentum of February. During January-April 2015, the average number of weekly reported S&P transactions in the secondhand market is 29 vessels, down by 16% year-on- year compared with 34 vessel purchases in the first four months of 2014 and up by 14% from 2013 levels (25 vessel purchases).

The highest level of weekly investments, for the first month, is no longer in the newbuilding business. 25 vessels are recorded as new orders on average per week against 31 secondhand vessel purchases. Compared with the investments in the secondhand market, in terms of number of vessels, the ordering appetite for the construction of new vessels is only 3.4% higher than the number of vessels purchased by shipping players worldwide, which is significantly lower from the 103% increase that was recorded in the first four months of 2014, said the shipbroker.

Meanwhile, it added that “for January-April 2015, the pace of new orders showed 61% yearly decrease and 19% Fall from 2013. In the demolition market, scrapping appetite of shipping players is showing retreat in March and April from the highs of January-February of this year. During January-April, the average number of reported demolitions per week is 18 vessels, up by 12.5% from the first four months of last year, but nears to the highs of business witnessed in 2013″.